The euro came under pressure today following Mario Draghi’s speech who noted that the current monetary policy was not an obstacle to the countries in the Eurozone conducting reforms. He failed to comment on any changes to the bank’s €60 billion bond buying programme and 0% interest rate. The euro corrected upwards following housing data from the US failing to meet analysts’ forecasts. Building permits in September reduced to 1.22 million versus the 1.25 million expected and 1.27 million in the previous month. Housing starts also declined to 1.13 million which is less than the 1.18 million forecasted.
Volatility grew for the British pound today following the release of labour market data in the UK according to which the unemployment rate remained at 4.3% which is the lowest figure since 1975. The number of unemployed grew by 1,700 against 1,300 predicted. Investors were disappointed despite the better than expected average wage growth of 2.2% in August which is 0.1% above the forecast. The wage increase is still lower than consumer inflation which hit 3.0% in September. At the same time fears about the outcome of Brexit talks and the negative influence of the country leaving the European Union will restrain the bulls from purchases.
Volatility growth is forecasted for the AUD/USD tomorrow around the data releases for unemployment in Australia and Chinese GDP, industrial production and retail sales. The state of the second largest economy in the world traditionally has a strong influence on the aussie quotes as China is the main buyer of Australian exports.
EUR/USD
The EUR/USD quotes tested the support at 1.1750 but were not able to fix below this mark. Currently, the quotes are located near the upper boundary of the local descending channel and breaking through it may become a stimulus for continued price growth with potential targets at 1.1825 and 1.1925. The chance of the fall resuming remains high and in case of opening short positions, targets will be at 1.1700 and 1.1620, the stop should be set above 1.1780.
GBP/USD
The GBP/USD has shown a spike of volatility but is now consolidating above the 1.3160 support, breaking through it may become a trigger for continued price drops to the 1.3000-1.3050 range. The potential rebound is likely to be limited by the inclined resistance and 1.3250 mark.
AUD/USD
The aussie price is trying to break through the inclined support line and in case of further decline, the signal to sell may come from the price fixing under the support line at 0.7800. Immediate goals in this scenario will be 0.7740 and 0.7700. The MACD signal line is heading to the zero mark and its crossing may become additional stimulus to buy with upside potential in the 0.7870-0.7900 range.
